Personal Consumption Expenditure Index: September 12-18, 2022

According to our Index. the demand for goods and services remains at the level of last year for the third week of autumn.

Spending on food products continues to decline. We note that they are already below the inflation rate. This means that people are not buying more food because of the high prices.

The slowdown in spending growth is still observed for most non-food products. Thus, the decrease in demand compared to last year is for construction materials, furniture, household appliances and medicines. The situation with medicines is partly explained by the fact that last year at this time was a high incidence of coronavirus and, accordingly, the demand for medicines was high, and therefore, we see a slowdown in demand against the background of the high base of last year. At the same time, the spending on office supplies, toys and sporting goods are growing.

Spending on services remained at the level of last year. However, demand continued to grow in the following categories: beauty and health, and construction. And the spending on medical services, air tickets, recreation and tourism continue to show a downward trend.

Thus in our opinion, the observed cooling of consumer demand for goods and services relative to the summer period is explained by increasing inflationary pressure (annual inflation for September was 17.7%) and previously purchased durable goods over the standard consumption level.

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